Rich renewable energy (RE) states like – Himachal Pradesh, Jammu and Kashmir and Uttrakhand posses 65 percent of India’s small hydropower resources but remains largely untapped, says a World Bank India report released on Friday.

“Given the flow of Himalayan rivers, their combined installed capacity is less than the combined small hydro capacity developed by Andhra Pradesh and Karnataka,” said the report titled ‘Unleashing the Potential of Renewable Energy in India’.

One of the problems cited in the report was prohibitive costs and regulatory hurdles in the growth of the renewable energy. “The only problem with the small hydropower projects is that you need clearances at 27 places which impede the growth of this sector. Normally it takes four to eight years to clear such projects in India.” Ashish Khanna, senior energy specialist, World Bank told reporters.

He held that India needs single window clearance for such projects.

The report also mentioned that small hydropower is the least expensive and most attractive form of renewable energy. “RE has become much cheaper than diesel, where cost of electricity from the diesel genset has increased from Rs. 4 kwh to Rs. 15 kwh,” it added.

“This cost is based when diesel is subsidised in India. If you remove the subsidy in diesel, the price can go further up compared to RE,” Khanna added.

The WB made it clear that the cost comparison with the nuclear energy was not studied in this report. India has signed civilian nuclear deals with few countries including United States and France in last two years. 

“The smaller hydropower units  encourage local entrepreneurs  and inclusive growth in a big way while ensuring that the locals are not destabilised. When we talk of small hydropower units, there is not much talking of resettlement, displacement,” Khanna said.

In the report, the World Bank also talked about the economic viability of RE projects. “The entire cumulative capacity of 68 GW in wind, biomass and small hydropower can be harnessed at less than Rs. 6/kWh,” the report is based on data of 180 wind, biomass and small hydropower projects in 20 states.

Two states with biomass potential – Orissa and Madhya Pradesh also remain untapped by the policymakers, it said. The report commented that only a minuscule portion of the solar power has been developed so far.

However, the Bank has lauded states like Tamil Nadu, Andhra Pradesh and Karnataka in tapping RE sources.

The report highlighted that India could produce 62 GW RE in an economically feasible manner, but would still constitute only around 25 percent of total capacity.

The report also warned that India’s coal reserves are projected to run out in 45 years. The country’s energy is mostly based on coal and natural gas, more than seventy-five percent. India’s electricity demand is huge to maintain nine percent of growth in coming decades. It is expected to grow at an average annual rate of 7.4 percent in the next twenty five years.

“India needs to apply multi-pronged solutions to achieve the massive additions in generation capacity to meet the demands of its fast-growing economy. Renewable energy is one such solution,” said N. Roberto Zagha, World Bank Country Director in India.